Post on 26-Jan-2017
KIKO Milano B2B Marketing Plan
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International Marketing B2B Project
IBL Year 4
18/02/2016
Adriano Aprile D10123389 D10123389@mydit.ie
Bébhinn McDonnell C12495382 C12495382@mydit.ie
David White C12343281 C12343281@mydit.ie
Ingrid Cazala C12393276 C12393276@mydit.ie
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DECLARATION
We, the undersigned, declare that this report is entirely our own written work, except where
otherwise accredited, and that it has not been submitted for a degree or other award to any
other university or institution.
Signed: _____________________________
______________________________
______________________________
______________________________
Date: ________________
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II. Executive Summary With almost 20 years’ experience in the cosmetics field, KIKO is a brand that is known and loved
worldwide. Although we operate in 500 successful stores branching across Europe and the
United States, the Irish market is one which KIKO has yet to fully capitalise on. By opening our
first Dublin store in the Dundrum Town Centre in 2016 we hope to meet a loyal customer base
who will become passionate about our brand as KIKO continues to spread throughout the entire
country.
Since KIKO was founded by the Percassi Group in 1997, the brand has been adored by
innumerable kinds of customers, from young girls just becoming interested in the cosmetics
world, to professional makeup artists of the highest degree. Consistently praised among the
worldwide beauty blogging community, KIKO is excited to finally arrive and meet the Irish
consumers who have been coveting after our products for years. The phrase which best
encapsulates the beliefs and goals of our brand is “Be who you want to be”, and as such we are
committed to providing customers with the highest quality products and tools which allow them
to express their true selves through a creative outlet, at prices which we believe are accessible
to everyone.
Expecting to confirm an estimated €432 million of revenue for 2015, KIKO is no stranger to
continually increasing profits and believes that fulfilling consumer desires of our much sought
after brand in Ireland will be the first Irish store will be of benefit to other companies trading
within the Dundrum Town Centre, who will surely experience heightened customer influx during
the exciting period of the opening of our KIKO store. We have confidence in the fact that our
KIKO store opening in Dundrum will bring great publicity to the shopping centre, as similar events
have proved in alternative locations where KIKO is available.
Undoubtedly the exclusivity of having this first store in Dundrum will prevail while KIKO
establishes its name in the minds of the Irish consumer, however, with the ensuing success of
KIKO Dundrum, we hope to expand KIKO over Ireland, with a ten year plan accounting for further
branch openings in Dublin City Centre, Galway, Cork and Limerick.
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III. Table of Contents
Contents II. Executive Summary ............................................................................................................................. 3
III. Table of Contents ............................................................................................................................... 4
IV. Current marketing situation ............................................................................................................... 6
A. Current Product Situation ............................................................................................................ 6
B. Company Situation ........................................................................................................................ 10
C. Current market situation ............................................................................................................... 14
D. Consumer Situation ....................................................................................................................... 16
Staffing .......................................................................................................................................... 17
E. Macro Environment Situation ........................................................................................................ 18
V. SWOT analysis ................................................................................................................................... 19
KIKO .................................................................................................................................................. 20
Strengths ....................................................................................................................................... 20
Weaknesses ................................................................................................................................... 21
Opportunities ................................................................................................................................ 22
Threats .......................................................................................................................................... 22
List of all competitors in Dundrum/Other cosmetic retail outlets in Dundrum .................................... 23
MAC (BT2) ......................................................................................................................................... 24
Strengths ....................................................................................................................................... 25
Weaknesses ................................................................................................................................... 25
Opportunities ................................................................................................................................ 26
Threats .......................................................................................................................................... 26
INGLOT .............................................................................................................................................. 27
Strengths ....................................................................................................................................... 27
Weaknesses ................................................................................................................................... 28
Opportunities ................................................................................................................................ 28
Threats .......................................................................................................................................... 28
BOOTS ............................................................................................................................................... 29
Strengths ....................................................................................................................................... 29
Weaknesses ................................................................................................................................... 30
Opportunities ................................................................................................................................ 30
Threats .......................................................................................................................................... 30
VI. Objectives ........................................................................................................................................ 31
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VII. Marketing strategy .......................................................................................................................... 31
The challenge ................................................................................................................................ 31
Customer analysis .......................................................................................................................... 32
Market segmentation .................................................................................................................... 32
Ongoing training ............................................................................................................................ 33
Free product samples and employee discount ............................................................................... 33
Packaging ...................................................................................................................................... 33
Distribution channels ..................................................................................................................... 34
Advertising strategy ....................................................................................................................... 35
VIII. Projected profit and loss statement & Balance Sheet ...................................................................... 37
Profit and loss statement ................................................................................................................... 37
Balance Sheet .................................................................................................................................... 38
IX. Controls ............................................................................................................................................ 38
Monitoring Performance ................................................................................................................... 39
RATIO ANALYSIS 2016 ........................................................................................................................ 39
PROFITABILITY ............................................................................................................................... 39
LIQUIDITY ...................................................................................................................................... 40
ACTIVITY ........................................................................................................................................ 40
X. Conclusion ......................................................................................................................................... 40
XI. Appendix .......................................................................................................................................... 42
REFERENCES ...................................................................................................................................... 46
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IV. Current marketing situation
A. Current Product Situation
KIKO prides itself on its high quality and the affordable, competitive prices of its products, which
is specifically outlined in the company’s mission statement:
“KIKO is constantly committed to a single objective: to allow all women to treat
themselves to the most innovative cosmetics without having to sacrifice their budget. To
give all their customers the chance to experiment in all areas of makeup and treatments
with top quality shades, packaging and formulas which are always on trend. Finally, to
create a beauty care concept which is able to rewrite the rules of cosmetics: quality is no
longer synonymous with high prices. With KIKO, professional luxury is an exciting reality
you can touch. For every budget”. (KIKO cosmetics, n.d.)
The company strives towards achieving brand loyalty amongst our customers by offering
individuals the opportunity to express themselves and their own identity through creativity and
personalisation, realising that not everyone’s beauty requirements and regimes are the same, all
while maintaining affordable prices for our high quality products. Another advantage KIKO holds
over our competitors is our prime location in Europe. Based in Milan, Italy, one of the fashion
capitals of the world, KIKO can remain up to date with all the latest fashion trends and pass on
that knowledge to our consumers through new innovations in our products based on current
fashion trends. An example of KIKO Milano implementing this into our market strategies was
through our application of “fast-fashion” planning in our brand stores. “Fast fashion”, a strategy
copied from the clothing fashion industry, means constantly changing the line-up of products in
our stores to encourage customers to visit more frequently. One of the key aspects for
implementing this innovative selling method into our sales strategy was due to the fact that KIKO
Milano can remain up to date on all the current fashion trends from our advantageous location,
and update our product line as the fashion trends dictate. This strategy is already showing
promising results, with other European cosmetic companies looking to apply similar policies.
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Kantar Worldpanel, a research firm, also reports that French 15-24 year olds now buy as much
from KIKO, in terms of volume, as they do from Sephora, a larger more luxurious cosmetics brand
with revenues estimated at €4.6 billion (A shake-up in make-up, 2015). Similar brand popularity
results within this age group were also confirmed in our consumer survey results:
Figure 1: Age of survey participants
Another aspect of our business that KIKO is proud to promote is our makeup advice service
provided in our own-brand stores. As well as offering customers the chance to express
themselves freely through our products, KIKO also offers informed advice on thousands of our
available cosmetic products from professional employees with many years’ experience in the
cosmetics industry. Unfortunately, as there are no current B2B operations between KIKO Milano
and the Irish market, and KIKO cosmetic products are only available to the Irish consumer through
our online store, this consultancy service is unavailable to Irish customers as there are no own-
brand KIKO stores in Ireland at present. However, in opening our first Irish store we aim to rectify
that situation and make that service available to Irish consumers through the opening of a KIKO
store here in Ireland.
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Primarily, KIKO products are manufactured mainly in Italy, with some minor manufacturing
conducted in France, Germany, the US and some Asian countries. The products are then
distributed for sale amongst our various stores. As a result of manufacturing and distributing
cosmetic products across Europe, KIKO must adhere to the European rules and regulations for
this particular industry. The HPRA (Health Products Regulatory Authority) is the Irish organisation
responsible for enforcing these EU cosmetic product regulations in the Irish market, regulations
which KIKO will have to adhere to when conducting B2B operations in Ireland. The new
regulations were introduced in July 2013, and we will examine these regulations in closer detail
further on in the marketing plan (Health Products Regulatory Authority, n.d.).
As well as following these European regulations, companies selling cosmetic products in Ireland
must also apply for a Certificate of Free Sale for Cosmetics. Companies selling cosmetic products
in Ireland, as defined by the HPRA, must submit an application form along with an excel
spreadsheet listing the products intended for sale and their product codes. Companies applying
for the first time, as we will be in this instance, must also provide a copy of the Company’s
Registration Office certificate, a notarised declaration of the products intended for sale and a
letter of responsible person designation where the applicant is not the manufacturer. A standard
set of four certificates are issued with a limit of 300 cosmetic product entries per application. A
standard application will cost €147 and will be issued within 3-5 working days (Health Products
Regulatory Authority, n.d.).
KIKO also works in full cooperation with the EU laws regarding animal testing; “KIKO does not
carry out or order testing on animals, pursuant to the relative European laws” (KIKO Cosmetics,
n.d.). Since 2004, EU regulators in the cosmetics industry have banned animal testing on finished
products, and as of March 2011, further enforced those laws by also prohibiting products
containing ingredients tested on animals outside of Europe. KIKO maintains that they have never
engaged in this practice even prior to the introduction of these laws, and not only do they prohibit
their final products from animal testing, but also in their raw materials. Both KIKO and the EU
take a strong stance on the issue of no animal testing on cosmetic products.
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As of December 2013, KIKO made annual sales valued at €417,772 million, making a profit of
€54,088 million in the process (Consonni, 2014). Net revenues for that year were valued at €418
million, whilst currently net revenues for the company are estimated at €432 million for 2015.
The success of 2013, which saw their profits increase by 19.1%, further encouraged their growth
internationally with new stores opening across Europe, and saw the company venture for the
first time out of the European market, and into the US market (Bottoni, 2014). In 2016, we hope
to improve upon that policy of international expansion and break ground in the Irish market for
the first time, as 2015 was another good year for KIKO.
In terms of brand recognition in Ireland at present, Irish consumers are already familiar with the
KIKO brand and our cosmetic products. In our consumer survey (see appendix 3), the question
was posed to participants “Which is your preferred brand of makeup?” with the results illustrated
in the diagram below:
Figure 2: Preferred Makeup Brands amongst Irish consumers
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The survey was conducted on 100 consumers, with 98% of consumers responding to this
question. Given in this particular instance that MAC and INGLOT are KIKO’s direct competitors
(the three highest ranked answers), Irish consumers already prefer KIKO brand products to
INGLOT brand products, even though INGLOT already has an established presence in the Irish
market, whilst KIKO has virtually no presence with exception to the online store. In terms of
online volume of sales, the best-selling KIKO makeup and cosmetic products include; KIKO
“Cream crush lasting colour eyeshadow” (€3.40, currently 50% off), KIKO “Long lasting stick
eyeshadow” (€6.90), KIKO “Volume and definition top coat mascara” (€3.60, currently 50% off)
and KIKO “Deep black eye marker” (€2.30, currently 70% off) (KIKO cosmetics, n.d.). As a result,
these and many other best-seller online products will be our main focal points during initial
promotion, given it is more likely that Irish consumers are already familiar with these cosmetic
products due to their popularity in the online store.
B. Company Situation
KIKO is a makeup and cosmetics company based in Milan, Italy, and defines itself as a “cosmetics
brand that features a range of cutting-edge makeup, face and body treatments, with safe and
effective products of the highest quality, created to satisfy the beauty requirements of women
of any age” (KIKO cosmetics, n.d.). The company was founded in 1997 by Antonio Percassi, former
Italian footballer and entrepreneur, and his company the Percassi Group, with his son Stefano
Percassi the current CEO of KIKO.
The Percassi Group, parent company of KIKO, oversees the business operations of its various
subsidiaries and categorises its operations into three different areas; House of Brands (the
category in which KIKO, one of the company’s most well-known brands, operates), retail
development and real estate. The Percassi Group, based in Bergamo, Italy, is one of the most
reputable and active companies (other subsidiaries include Madina, Vergelio and Atalanta
Football Club) operating both within its domestic market, and through its numerous international
business ventures. Percassi Group describes its own business operations as follows; “A solid and
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dynamic business society that successfully anticipates market trends with a vision that goes
beyond Italian borders” (Percassi, n.d.).
The Percassi Group and all of its subsidiary companies also pride themselves on conducting their
business activities through the values and beliefs of the “Made in Italy” brand name, which
promotes the qualities and ideals of Italian business etiquette throughout the world. The “Made
in Italy” values that one associates with a company operating under this brand name include;
producing goods or services with pride and care to ensure high quality, the knowledge of
traditional artisanal methods passed down through generations and promoting creative Italian
intelligence and manufacturing on the international scene (Made in Italy, n.d.).
KIKO is one of the Percassi Group’s most profitable subsidiary companies, with current revenues
estimated at €432 million since its establishment in 1997 (A shake-up in makeup, 2015). The
company operates through a combination of selling our products through our worldwide online
store (KIKO cosmetics, n.d.), and through a chain of more than 500 own-label stores located
throughout Europe and the US. Currently, consumers in Ireland may only purchase KIKO brand
cosmetic products through the online store, as there is no KIKO store based anywhere in Ireland.
Shopping for KIKO products online includes a minimum purchase order of €25 (not including
online discounts) to be eligible for online delivery, and a waiting period of 6-7 working days for
shipping and delivery. We at KIKO know that cosmetics consumers prefer to test the finished and
true colours of our products in person, which is a notable factor in our need for opening an Irish
store. Furthermore, having our own stores operating in Ireland will let Irish consumers
experience our makeup application services and in-store tutorials. Our aim with this
development is to expand the KIKO cosmetics brand into the Irish market, thus making our
products readily available for Irish consumers. The brand has seen a lot of success throughout
the European market and we pride ourselves on targeting international market opportunities,
and we believe the Irish market (specifically the Dublin market) can be one of those international
opportunities as it garners a lot of potential consumers in an already successful cosmetics market.
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KIKO does not operate through franchises in the market, instead preferring to distribute our
products through a directly managed chain of single brand stores. As a result, we are looking
towards the possibility of opening a store in Dundrum Town Shopping Centre, Dublin, given the
affluent and prestigious location and its reputation as a popular shopping destination. In
September 2015, Dundrum Town Centre, Ireland’s largest shopping centre, was sold to foreign
investors as part of the NAMA-run Project Jewel Loan Portfolio. The deal saw the shopping centre
sold for €1.85 billion to Hammerson and Allianz real estate agencies, based in the UK and
Germany respectfully, making it the biggest single transaction carried out by NAMA to date
(Sheils McNamee, 2015). This acquisition by new investors could mean potential for further
growth as regards to retailers within the shopping centre as they look further increase their
portfolio. Our decision to consider the possibility of opening a KIKO store in Ireland also came as
a result of a consumer survey which we carried out in order to determine potential consumer
interest and opinions. One of the questions posed in the survey was “Would you be interested in
a KIKO cosmetics store opening in Ireland?” and the promising results were as follows:
Figure 3: interest in the Irish market regarding the opening of a KIKO Ireland store
The survey was conducted on 100 consumers, with 84% of participants responding to this
question.
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Our enquiries about the availability of a retail unit in Dundrum Town Shopping Centre began in
January 2016, when we contacted Bannon and Savills retail agencies who handle all queries
regarding the lease of units within the shopping centre. From there, we were put in contact with
Jennifer Mulholland, Retail Surveyor at Bannon Retail Agency, who was able to provide us with
the necessary information regarding the costs and processes of leasing a retail unit in the
Dundrum Town Centre. The particular retail unit she provided us with information is the unit
currently occupied by Sisley (located on the second floor of the Dundrum Town Centre), which
will soon be available for lease;
· Units in Dundrum Town Shopping Centre are available for rent only
· The particular unit we are interested in is 128.3 metres squared
· Rental costs are €315,000 + 23% V.A.T. per year (V.A.T. can be claimed back once the
company is V.A.T. registered)
· There is a €16,890 service charge on top of rental costs (i.e. key money, for use of the store
space and store facilities) which is paid quarterly
· Insurance costs are €1,240 per annum
· Authority rates of €35,241 must be paid to the Dundrum Town Authorities and are usually
paid biannually. These payment schemes can be arranged with Dun Laoghaire-Rathdown County
Council
· Store utilities (i.e. electricity and heat) are to be paid for by KIKO
· The minimum commitment is a 10 year lease ( compared to other Dublin shopping centres
which offer two 5 year leases allowing a company to leave the unit after 5 years, however,
Dundrum Town Centre does not offer this)
· These units are of high quality, and in such an affluent area and are in great demand; It is
requested that those wishing to rent must either be a notably successful company or one which
is willing to offer a large deposit
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· If we choose to apply for the unit, our solicitor will contact the Bannon or Savills letting
agencies, where a lease is drafted between our solicitor and their solicitors, and as such the lease
is negotiated between the two parties, reviewed again and then signed once all parties come to
an agreement
These prices and conditions, implemented before the acquisition of Dundrum Town Shopping
Centre in 2015, may be subject to change under the new management of the shopping centre.
As this will be KIKO’s first venture into the Irish market and there are no existing B2B operations
between KIKO and the Irish market at present, we will initially focus primarily on the Dublin
market, with particular emphasis on targeting closer-by South Dublin consumers (although we
do expect the excitement surrounding our new store to attract customers from all over the city).
We hope in the future with the success of the company in the Dublin market to expand the
company and target more areas and opportunities within the Irish market.
C. Current market situation
One of the most vital aspects of introducing KIKO into the Irish cosmetic industry is that we must
carefully research in detail the current situation of the cosmetic market in Ireland. There has been
an impressive increase of interest over the past years in the cosmetic sector which is mainly
represented by multinational companies with their manufacturing bases located in Ireland. These
are small to medium sized multinationals which have led to one of the most successful innovation
examples in the SME sector therefore showing how fast the global market for cosmetics is
evolving.
According to Euromonitor, the Irish skincare market accounted to €110 million with an increase
to around €130 million in 2014 showing positive signs for potential foreign cosmetic companies
such as KIKO, to enter the Irish market as it shows continuous growth. The value of the European
cosmetics market for the same period was around €67 billion. Although Irish cosmetic companies
are being overshadowed in the market by the more popular foreign brands such as MAC, INGLOT
and L’Oréal, Irish home grown companies have taken an approach towards selling more natural
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products. New Irish brands such as Voya have had success in exporting their products in cities
such as Dubai and London, as they have doubled their turnover over the past four years by
introducing natural and organic products. Irish companies have had to take a different approach
to the quality of products sold, as the competition with the multinationals is far too difficult to
contest.
According to Eurostat, Ireland exported €157 million worth of cosmetics in 2010. This is largely
accounted for by multinationals with an Irish manufacturing base. This shows that even though
Irish cosmetic companies are taking the more natural approach to their products, the
multinational companies are still by far the most consumed in the market. This is why we believe
that KIKO entering the Irish market would be a huge success, supported by our survey results
which show that 92% of consumers questioned are interested in a KIKO store opening in Ireland.
Market legislation
All multinationals must comply with the EU legislations set out, including labelling and the list of
ingredients used in their products. The IMB (Irish Medicines Board) make sure all the products
comply with the law before the companies are allowed to introduce their products to the market.
The new legislations set out by the EU have made it far more challenging for Irish cosmetic brands
to compete with multinationals as they have opened up the market for foreign investment, which
of course on the plus side is exactly what companies such as KIKO are ecstatic about as it opens
up their possibilities of expanding their global market.
The EU sets out rules and regulations to follow for every cosmetic brand in the EU, no matter
how big or small the channels of distribution, cosmetic products placed on the EU market must
be safe. The manufacturer is responsible for the products they offer on the market, therefore
must be scientifically tested and undergo certain assessments before being sold. In order to
assure the companies are on the right path, the EU set out a database in which they can follow
to ensure the best possible outcomes for the product results called the ‘CosIng’ which shows the
substances allowed with the legal restrictions and requirements. There are four more steps
required to follow such as all products must be registered in the Cosmetic Products Notification
Portal (CPNP) being the product is placed on the market. If a cosmetic product has a scientific
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complexity or higher risk to consumer health the regulators have the right to spend more time
researching and examining the product. They must also ensure that there is a ban on animal
testing for cosmetic purposes which is something KIKO continuously highlight throughout their
website and marketing strategies and finally the EU is responsible for the market surveillance at
a national level in order to collect any valuable information they demand
KIKO is already established in most major European countries such as the UK, France and
Germany, therefore it is quite evident that we have correctly followed all the product safety and
legislation set out by the EU. Because of this, opening up our store in Dublin will not be as
challenging considering that we shall follow the steps and procedures already set out by KIKO in
terms of opening up another store in the EU.
Of course as of today, there are no KIKO stores in Ireland, so we must comply with the Irish
legislation set out by the HPRA as they have different rules and regulations than other EU
countries. The HPRA is responsible for the regulation of cosmetic products in Ireland. Their aim
is to ensure all cosmetics on the Irish market are safe and comply with the new laws. They identify
and address cosmetic product safety issues, in conjunction with the HSE, so that a cosmetic
product will not compromise the health and safety of the consumer or the person applying the
product. On 11 July 2013, new laws came into force impacting all those who sell cosmetic
products in Ireland. All retailers who sell cosmetic products should be aware of these new laws
and the legal requirements now in place (Health Products Regulatory Authority, n.d.). They have
listed possible scenarios or problems that a new retailer in Ireland may face and how to overcome
the situation in the correct manner, and of course KIKO will use this resource in any situation
deemed necessary.
D. Consumer Situation
A great draw for KIKO in operating in Dublin is the ever growing community of makeup lovers in
Ireland, both male and female, and of varying age groups. In recent years, Irish consumers have
been becoming more and more creative with their cosmetic use, constantly searching for new,
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exciting products that they can use to express themselves. This trend is best demonstrated by
the continually expanding community of Irish beauty bloggers, and the popularity of various
cosmetic review websites such as beaut.ie. Naturally Irish consumers value the advice and
opinions of popular Irish beauty bloggers such as Chloe Boucher, LetzMakeup (Siobhán
McDonnell) and BeautyLifeMichelle (Michelle Crossan), however, the boundary cutting nature of
the internet leaves Irish consumers watching vloggers from overseas, desiring foreign brand
names that are not currently available in the country. We strongly believe that KIKO is one of
these brands, and that the reputation of the Italian brand is one which will intrigue and excite
Irish consumers. Awareness of the KIKO brand will continue to be spread via the
#kikotrendsetters hashtag, a social media campaign which encourages KIKO customers to share
their makeup looks by listing the products they use.
As mentioned, our consumers often put a lot of research into which products they purchase, and
the cosmetic industry thrives on good reviews and word of mouth endorsement. Our low price
point matched with a high quality product is one which will pull consumers who have already
heard of our brand, whilst also charming new customers who can afford to test our products and
form their own opinions without breaking the bank. It is important for KIKO to open a store in
Dublin, as whilst the e-commerce industry is becoming universally stronger, we know that
cosmetics consumers are less likely to spend their money on a colour or finish of a product that
they cannot test out on their own complexion in person.
Staffing To begin with our store will have a total team of seven members, including a Store Manager and
Deputy Manager, two full-time workers and two part-time workers to provide support during
busy weekend hours. However there is a possibility of increasing the number of part-time
workers to three during sale periods. We feel confident that in a city such as Dublin which is
home to such prestigious makeup academies such as LA College of Creative Arts, Vanity X,
Makeup Forever and The International Makeup Academy we will have a large pool from which
to discover our potential employees. We will hire employees who are adept of working in a fast
and dynamic environment, who are confident in their cosmetics knowledge and capabilities.
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E. Macro Environment Situation In the third quarter of 2015, the Irish economy grew by 7%, with an increase in output seen across
all business sectors (Beesley, 2015). This comes as an increase from the estimated 6% growth
predicted in November of last year, making it the fastest growing rate in the EU according to the
European Commission. Whereas in the past Irish economic recovery was driven by net exports,
growth “is now firmly based on domestic demand across economic sectors” (The European
Commission). However, the EU commission warns against the “volatile” nature of these figures,
and assumes that all of their findings comes with the expectation that Britain will remain in the
EU, with the ESRI (Economic and Social Research Institute) reporting that a British withdrawal
from the EU could cost Ireland billions of euro (Lynch, 2015)
As per the Irish Department of Finance’s annual budget of 2016, CSO statistics show that in 2015
Irish consumers had become wholly more confident in spending their earnings. The Irish
Department of Finance predicts GDP, GNP and Nominal GNP to increase by 4.3, 3.9 and 6.2
percent respectively in 2016. An estimated 42% of the overall Irish GDP is accounted for by Dublin
(Dublin: Facts and Figures, 2016).
Date GDP in €Mill Quarterly % Change GNP in €Mill Quarterly % Change
Q3 2015 50,904 1.4 42,311 -0.8
Q2 2015 50,131 1.9 42,839 1.9
Q1 2015 48.849 1.4 41,803 -0.8
(Quarterly National Accounts, 2015)
In August 2015, Irish retail sales had risen 9% year over year. September 2015 saw Ireland’s
unemployment rate recorded at 9.4%, which is lower than the current European average of 11%.
As of 2013, an estimated 840,000 people were employed in the Dublin region, accounting for
over 40% of the total number of people employed in Ireland (Dublin: Facts and Figures, 2016). In
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the last CSO Census (2011) Dublin city’s population was 1,273,069, consisting of 619,902 males
and 653,167 females.
Dublin is currently undergoing a phase of expansion, with essential construction work being
carried out on the Luas system, one of Dublin’s most used forms of public transport. This work
does not affect the Green Line which currently runs from Stephen’s Green and is used by many
North-Dubliners to reach Dundrum Town Centre. This point is positive as it will not deter those
who wish to visit our new KIKO store, and furthermore once the construction work has been
completed in 2017 the entirety of the city will be better linked, allowing customers to visit our
store even more effortlessly.
In terms of the socio-economic landscape, Ireland is entering a new, modern era. On Friday May
22nd 2015, Ireland voted 62% in favour to amend the constitution and extend civil marriage
rights to same-sex couples, making Ireland the first country in Europe to provide that right by
popular vote (Same-sex Marriage Referendum, 2015). This was a monumental day in Irish history,
further strengthening the belief that Irish people are welcoming and accepting of all lifestyles.
The vote proved that Irish society is adhering less and less to preconceived social conventions
and prejudices, making it easier for individuals in our society to express themselves personally.
This could prove advantageous to our marketing plan, as one of the main aspects of KIKO makeup
is the ability to express oneself through our cosmetic products, thus providing individuals in the
Irish society the ability to express their personalities and identities in a visual manner, regardless
of gender or sexual orientation.
V. SWOT analysis Since KIKO began operating in 1997, we have been focused on maintaining standards which allow
our business to run as effectively as possible. We base these guidelines on the merits and issues
raised in our comprehensive SWOT analysis. We constantly strive to conserve our strengths,
nourish our weaknesses, search for new opportunities and find solutions to our threats, which
are listed below.
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KIKO
Figure 4: Proposed floor plan for KIKO Milano store, Dundrum
Strengths KIKO is an internationally popular brand name, with over 500 stores across Europe and 25 stores
within the United States. KIKO provides high quality products at affordable prices, suiting both
those who want to experiment on a budget and those more experienced makeup users who
require a large variety of colour. KIKO’s price range is suitable for Irish consumers who are
continuing to carry out their price-conscious, post-recession consumption habits.
KIKO price range by product
The product range available at KIKO is vast with over 1,000 products to choose from and is
constantly expanding. The most inclusive foundation product made by KIKO is available in 21
Face €2.20-€15.90
Lips €1.20-€8.90
Eyes €1.20-€15.90
Nails €0.50-€8.90
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different shades, allowing our brand to cater to consumers of diverse origins and ethnicities.
KIKO’s Clics Palette system is innovative in allowing customers to personalise their makeup
palettes by tailoring each palette to suit their needs as with most pre-designed palettes have
certain colours that are never used.
KIKO Milano is an Italian brand, with a respected Made in Italy reputation which is synonymous
with the generalised public view of luxury, high quality goods. Regardless of the price KIKO is
well known for their quality that rivals that of their high-end competitors.
As KIKO operates in standalone stores, consumers shopping in our store are likely to find all that
they are looking for in one convenient location, and are unlikely to be drawn in by thoughts of
competitors as they would be in locations where various brands are available, for example, Boots.
In terms of sales, KIKO is focused only on the sale of cosmetics. All KIKO Sales Advisors are trained
in makeup artistry. Customers can shop confidently knowing that KIKO Sales Advisors are
knowledgeable about various products. Customers can also make appointments to have their
makeup applied by one of our trained makeup artists which will in turn help them to find out
about new and interesting products and see them put into use.
Weaknesses KIKO may not initially be as well known amongst Irish consumers, particularly with older
customers who do not spend as much time comparing brands online. Irish people can be
reluctant to try new products and unfamiliar brands. KIKO’s campaigns are often target only at
young women and girls as this would be our main target audience. However the company could
do more to promote their range of anti-ageing products and should also consider their strong
male base of consumers, as times are changing so are the habits of the male population as it is
not such faux-pas to discuss a man’s skin care regime and accepting the fact that some men do
actually wear makeup. Currently, KIKO does not offer a specific discount for professional makeup
artists or students. There is also no opportunity for customers to have their orders delivered to
a KIKO store, which usually is preferable for consumers who wish to avoid home-shipping costs.
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Opportunities
Figure 5: Irish consumer awareness of KIKO brand
First and foremost it is quite clear to see that even though KIKO has not yet been introduced into
the Irish market over 60% of people questioned have heard of the brand, according to figure 5.
The KIKO brand would be fresh and exciting for Irish consumers as it has previously never been
sold in Irish stores. The brand is already popular amongst Irish cosmetics consumers and within
the Irish beauty blogger community (beaut.ie and various other outlets often write articles noting
KIKO as one of the top brands to purchase while on trips abroad). KIKO currently runs the
#kikotrendsetters social media campaign which should be familiar with Irish consumers.
Threats The cosmetics industry is highly competitive and there is already much competition in terms of
cosmetics retailers in Dublin. Consumers may be more likely to stick with their trusted, more
familiar brands initially. KIKO’s low prices could be associated with low quality to consumers who
are not familiar with the brand. The cosmetics industry is full of rapid changes in market trends
and consumer preferences, all of which could differ throughout international markets. In
accordance with the research we have carried out within the Dundrum Town Centre we believe
our main competitors to be MAC, INGLOT and Boots Pharmacy. Each company has positive and
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negative attributes that we will now examine in depth to demonstrate why we believe that
Dundrum Town Centre would be an optimal location in which to open KIKO’s first store in Ireland.
Dundrum Town centre is the largest and undoubtedly the best shopping centre in Ireland with
over 100 stores and 40 restaurants and cafés, attracting visitors from all over Dublin and
elsewhere in Ireland. The Dundrum Town Centre has an admirable reputation for being
constantly on trend and providing high quality products to consumers who wish to express
themselves via well-known, reputable brands.
List of all competitors in Dundrum/Other cosmetic retail outlets in Dundrum
Boots
BT2
Harvey Nichols
House of Fraser
INGLOT
MAC
Marks & Spencer
McCabe’s Pharmacy
Penneys
The Body Shop
Primarily we identify three leading competitors for our brand which currently operate in
Dundrum Town Centre, which are MAC, INGLOT and Boots. The following notes detail the
strengths, weaknesses, opportunities and threats of each respective company, supplemented by
table 1, which is a comprehensive view of our competitor’s price ranges by median.
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Table 1: Median list of competitor prices
Face
Eyes
Lips
Nails
€10.50 €9.15 €5.65 €4.95
€45.50 €47 €29.50 €10
€23 €13 €11.50 €8.50
€30 €44.50 €20.50 €45.50
MAC (BT2)
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MAC is a Canadian cosmetics company, sold in Ireland through Brown Thomas and BT2 stores.
Although Brown Thomas has a beauty hall comprising of various high-end brands, we believe
MAC to be one of our main competitors as it has comparable products to KIKO, and it was the
preferred makeup brand mentioned in our market research survey, as seen in figure 2.
Strengths MAC has long been one of the most commonly used makeup brands in Ireland, popular amongst
both young consumers and makeup artists (who receive a professional makeup artist’s
discount). MAC also has a strong website and online presence, and through Brown Thomas offers
a click and collect service by which customers can collect their orders in store free of a delivery
charge. MAC has an extensive range of shades unrivalled by any other brand in Dundrum. Their
most inclusive foundation includes 46 shades. As a part of the Brown Thomas store, MAC is
constantly on display to customers who may not have been shopping for cosmetics. MAC Sales
Advisors are trained makeup artists which have a dedicated focus and training towards
cosmetics. Makeup application services are an essential draw for MAC customers. MAC has
endorsement contracts with many popular celebrities such as Ellie Goulding, Lorde, as well as the
ambassadors for their Viva Glam MAC AIDs fund campaigns. MAC has also drawn in customers
with their special edition pop culture ranges which have included themes such as Disney, The
Simpsons and the Rocky Horror Picture Show. Charitable efforts are a top merit for MAC. The
MAC AIDs fund was set up in 1994, and 100% of revenue from the brand’s Viva Glam lipsticks go
towards helping people with HIV and AIDs.
Weaknesses One of the things that deters clients away from MAC would be their considerably high prices
which have been noted below.
Face €18-€55
Eyes €9.50-€75
Lips €15.50-€28
Nails €10
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Even though MAC offers discounts for professional makeup artists, no discount is given to
students which along with their high prices would be quite difficult to justify spending that
amount. As MAC was originally created for professionals, their products and shades were
created for professionals. This in turn could be double Dutch to their consumers and can deter
clients from asking for help. It is of no secret that MAC retail artists work from commission. It
can be quite difficult for a client to look around without being approached numerous times and
then once a client has been helped they have no chance to change their mind as their item is
brought behind the counter until you are ready to pay
Opportunities From our research, figure 2, shows that MAC is the best known brand among those surveyed and
from that a presumption could be made to say that the majority of makeup owners have at least
one MAC product in their collection. For the few customers that have not heard of MAC or do
not own one of their products new customers are constantly being drawn in by celebrity
endorsements. Even though MAC doesn't necessarily have a loyalty card of sorts they do have a
scheme called “Back-to-MAC” in which customers are encouraged to keep their empty packaging
and after collecting 6 items they can then be swapped for a lipstick, with an R.R.P. of €19. This is
MAC’s version of a loyalty card that does seem to be working quite well.
Threats There are constantly new brands being introduced into the market and with that comes new
competition. MAC is a brand that seems to have found good formulas and simple, recognisable
packaging. They don’t change or add to their collection with the exception of their celebrity
collaborations which in turn means that their products can seem quite boring and can lack a bit
of innovation. With brands such as KIKO being introduced into the market that share similar
quality products and services this will definitely be a big rival for MAC continuing in the Irish
market.
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INGLOT
INGLOT is a Polish cosmetics brand that has been operating in Ireland since 2009, with a current
total of 9 stores across the country.
Strengths INGLOT has the most comparable price point to the KIKO brand whilst also having a competitive
standard of quality. Below is a list of INGLOT’s competitive price range by product.
INGLOT also operates as a standalone store, which in the Dundrum Town Centre is located on
Level 1. Their store is not in a closed premises, but rather a kiosk layout. This can be considered
a strength for them as customers can browse without commitment, and can be drawn into their
Face €3-€40
Eyes €6-€20
Lips €4-€15
Nails €2-€15
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product range while passing by. INGLOT has a very wide range of colour choice. Their foundation
with the broadest offer includes 22 shades, catering to the needs of many customers of various
ethnicities. Furthermore, INGLOT offers over 200 shades of eyeshadow, 200 nail polish colours,
and 150 lipstick shades. INGLOT products can be purchased on their “Freedom System”, a
magnetic palette which is desirable as products are cheaper due to reduced packaging costs, and
furthermore because customers can customise their palettes to suit their own taste. INGLOT is
solely a cosmetics store, and can focus all of its efforts towards optimal knowledge in the
cosmetics industry. Similar to MAC, sales advisors at INGLOT are trained makeup artists, trusted
by customers to perform makeup application services and provide qualified advice on
products. Not only this but they also perform personalised tutorials and group
masterclasses. There are two types of INGLOT customers who can avail of special discounts.
Qualified makeup artists receive a discount of 20%, and students receive a discount of 10%.
Weaknesses However, unlike MAC, INGLOT does not offer a click and collect service even though consumers
can have their products delivered to their door. As there are not many stores in Ireland many
consumers would be hesitant to not only pay for shipping but also the fact that makeup can’t be
returned adds to the pressure of buying something online. While many companies choose to pay
celebrities to endorse their products, INGLOT steers away from this and since their creation has
yet to form a collaboration with any celebrity.
Opportunities Many students especially are drawn to bargains so by offering a 10% discount this helps to
encourage many students to part with their cash. There is always the possibility that INGLOT will
offer a Click and Collect service as they continue to progress with their online presence.
Threats Like every other makeup brand a new and exciting one can be brought onto the market and deter
clients with something new and exciting. Especially in today’s economy where the quality of
brands is increasing while the price seems to be decreasing.
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BOOTS
Boots Ireland is a subsection of the British pharmacy chain which has been operating in Ireland
since 1996. Currently there are 80 branches of Boots stores across Ireland.
Strengths Boots sells a vast amount of different brands, allowing customers with no brand loyalty to shop
between brands at their pleasure, constantly discovering new products for clients with any
budget. Not only this the pharmacy is also a one stop shop for a vast range of common household
essentials such as plasters, pain relief and soap. In turn this encourages customers to pick up a
few extra cosmetic products that may not have been originally on their ‘’to-buy’’ list. The
Dundrum store is notably large, and the range available consists of a large price range.
Face €2.79-€54.50
Eyes €2.50-€84
Lips €2.50-€38.50
Nails €0.50-€89.99
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Boots offer an advantage card system by which customers earn 4 points for every €1 spent. Each
point equates to 1 cent, and can be spent in the purchase of a whole product in Boots stores.
This is a great loyalty incentive for customers. A further incentive for customer loyalty offered
by Boots is the 10% student discount available in Irish stores, and discount vouchers given to
customers post-purchase.
Weaknesses Boots is a pharmacy and therefore does not have a complete focus on cosmetics in the same
sense that KIKO does. Furthermore, sales assistants are not specifically trained in each makeup
brand. Which in turn means that they have a much more diluted product knowledge than one
would have in one specific brand along with the fact that they are not brand loyal as their
objective is to sell regardless of the brand. Currently, Boots do not offer a discount for
professional makeup artists. Also, the fact that Boots has such a vast range of products and
brands may be overwhelming for some customers with little cosmetics knowledge.
Opportunities Recently Boots has added Los Angeles brand NYX cosmetics to their online store. Like KIKO, this
foreign brand was previously not widely available in Ireland and if this range was to be brought
into stores it could generate a similar excitement, drawing more customers to visit Boots
stores. Along with this fact Boots has such a strong presence in the UK and Irish markets that
there is always the possibility of the brand being introduced into other new markets which has
been aided by their alliance made with the American pharmacy called Walgreens.
Threats There is always possibility of further competition entering the market, specifically from stores
specified only in cosmetics. Along with this there is also a large increase in the number of
discount competitors that have started to sell branded toiletries which would definitely have a
negative impact on their currents sales figures.
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VI. Objectives Our objective in opening this Dundrum store is to give Irish consumers the opportunity to
experience and fall in love with the KIKO brand. We feel that despite a healthy amount of
competition we can offer a new and exciting brand which will suit Irish consumer’s tastes at
reasonable prices, and it is our aim to communicate this to the community of cosmetics users in
Dublin. We feel that our unique products, which are innovative and of top quality, will garner a
following that could draw customers from all over Dublin to this exclusive Dundrum store. Our
brand shall be promoted by KIKO Sales Advisors who are passionate about the brand and can
express all of our company morals and performance objectives effectively in order to acquire and
maintain a loyal following of customers who can in turn spread awareness of our brand.
VII. Marketing strategy
Having a well-structured marketing strategy is vital to the success of the company as one aspect
of a marketing plan affects all others. Coordinating our activities is critical for overcoming the
competitors and maximizing our profits. Our marketing strategy looks at all of the areas of our
selling activities and helps each one support the next, making sure all of our departments are
aware of what each is doing. As this represents our first venture into the Irish market, it is pivotal
we implement a successful marketing strategy in order to promote our products to our targeted
audience and maximise initial profits as much as possible within the first year, with the view to
expand the company even further in the near future.
The challenge KIKO is well known for selling original and high quality skin care products, foundations, eye
makeup and lip products that is unique and can meet customers, who are continuously searching
for the perfect makeup collection that matches their skin tones and textures, demands. KIKO
strives to become one of the world's leading makeup brands and by doing so have always
produced products of the highest quality and competitive price.
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Customer analysis Research shows that the cosmetic market is growing at a fast rate, and given that KIKO is already
well established in foreign markets, its products within the product life cycle are already entering
a mature stage. KIKO’s main aim is to produce safe, natural and high quality products as
customers in today’s market now demand more information, while at the same time becoming
more aware of the health issues. For example, in 2007, a campaign to raise awareness for
cosmetic products was launched, and surprisingly one-third of the samples studied in accordance
with the campaign exceeded the legal limit, which included major brands such as L’Oréal and
Christian Dior. From the results gathered from our own consumer survey, we established that
92% of the participants were interested in a KIKO store opening here in Ireland. We are confident
that as soon as we open a store in Dundrum Town Centre, it will immediately attract a large
number of potential customers to the store and maximise a high footfall to sales conversion rate.
Market segmentation Effective market segmentation research provides our company with clear direction on which
group or groups represent the best target that will account for a high share of potential profits
for the company and can easily be identified in the population or in customer databases. If our
market segmentation meets those requirements, then it will pay for itself many times over. If it
does not, then it will become a quickly discarded waste of resources.
Based on the results of our consumer survey, we determined that the age group that had most
interest in the KIKO brand was those aged 18-24. We believe that this is due to the fact that KIKO
advertise and sell products at a more affordable and competitive price, while maintaining high
quality standards. We believe that the majority of 18-24 year olds fall either under the category
of students or part-time workers, and therefore the KIKO range is a perfect fit for their budgets.
Dundrum Town Centre is also a well-known social area for 18-24 year olds to spend their free
time, and with other notable brands such as MAC and INGLOT stores already in the shopping
centre, this demonstrates that the demand for purchasing makeup is popular, so with KIKO’s
favourable price differences, we believe that we can be very competitive with the top brands in
the shopping centre. Due to our potential high costs of leasing a unit in Dundrum Town Centre,
we believe it is important to target our time and resources at this particular age demographic. It
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is important that we enter the market with our strongest marketing strategies by focusing on the
most interested groups (18-24), and cannot afford to waste time, money or energy as we cannot
emphasize enough the importance of a positive and profitable start.
Ongoing training Ongoing training for employees offers a way to make sure that skill used are constantly improved.
It offers opportunities to trust employees on feedback such as recent product line changes or
upcoming improvements. If, for example, KIKO’s latest lipstick range has a special ingredient that
makes it more moisturizing and longer lasting than other similar competitor products, the sales
staff should be aware of the product change as well as obtaining an understanding of the
benefits.
Free product samples and employee discount Giving employees free samples of new products and a 20% discount on those that we already sell
well lets them experience the products first-hand. For example, if KIKO develops a new innovative
foundation, a sample may help members of the sales staff (especially new employees) gain
knowledge of its advantages. This also provides an opportunity to receive feedback. An internal
survey is a good way to gather information and to indicate whether employees truly believe in
the product. We want to make sure that our employees show a high level of enthusiasm when
selling the KIKO products to the customers.
Packaging Since KIKO is an already established brand around the world, we will not have to create our own
specific packaging for Ireland as all product packaging is the same throughout the globe. All
products are sold in English speaking countries so we will not have any issues of translating any
ingredients or instructions that our found on any KIKO goods. KIKO manage to combine form and
function to create appealing and efficient packaging for cosmetics, skin care, eye makeup and
other personal care items. Due to the highly competitive market, consumers must be attracted
to the packaging as much as the product itself. KIKOs packaging is also very eco-friendly, and as
consumers are growing increasingly aware of the impact that the products that they use have on
the environment they want to reduce this impact as much as possible. Some examples of KIKO’s
environmental efforts are the use of recyclable materials in the packaging itself, lightweight
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packaging in which less material is used to create the products, the use of bio-resins in certain
plastics and finally packaging material that is easy to clean and recycle when the product is empty.
Packaging for KIKO is a vital aspect of implementing our market targeting strategy. KIKO aims to
constantly showcase our products in a fresh and exciting manner which is particularly
comparable to luxury brands (see figure 6 comparing KIKO packaging to luxury brand NARS’
packaging). This packaging is designed to be wholly appealing to our target market of the 18-24
age-group, who should feel glamorous and confident in using our products. The sleek silhouettes,
monochromatic labelling and innovative design features of our products are all aspects which
should increase our consumers’ desire.
Distribution channels A distribution channel is a plan created by the management of a manufacturing business that
specifies how the firm intends to transfer its products to intermediaries, retailers and end
consumers. Larger companies involved in making products will usually also put together a
detailed production distribution strategy to guide its entry into its intended market. Since KIKO
are already operating in other major European countries, we believe that we could follow similar
distribution channels to the UK. All products will be transported from Italy to the UK, and from
there we will organise transport from the UK to Dublin, shipping from Liverpool port to Dublin
port, and then transporting the products via vans to our store in Dundrum. Since we will be the
only store in Ireland and new to the Irish market we will not have direct shipments from Italy due
Figure 6: KIKO packaging vs. NARS packaging
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to costs, so we believe to minimise the costs at the beginning, KIKO will organise extra shipments
to the UK for our Dublin store which will be later shipped to Dublin via Liverpool. We will contact
and negotiate an agreement with JMC van delivery service to collect the goods from Dublin port
and deliver them to Dundrum Town Centre. We plan on forming a contract with JMC on receiving
shipments from Liverpool every two weeks, but if our store needs more stock and extra
shipments from Liverpool we will negotiate a separate contract with JMC based on any additional
transport needed to our store.
Our distribution strategy will not require customs duties or an export declarations due to the free
trade agreements set out within the European Union. However, as we are shipping our products
between destinations, a bill of lading is necessary. This is a legal requirement which informs us
of the type, quantity and destination of the produce being transported and must be included
with the products while being transported and will be signed by our company at the arrival. In
order to control and monitor our goods we have decided to adapt an online tracking system to
make sure the products are arriving on time and we are able to communicate with the JMC
drivers to collect the goods at Dublin port at a specific time. We also will not have to adapt any
incoterms for now, as KIKO in Italy are covering all insurance expenses for us since we are a new
store, but in the future we believe we may have to receive our products directly from the
producers and therefore will have to adopt the right incoterm in order to divide the costs of
international business transactions and define the responsibilities of both the buyer and seller,
while reflecting the current practices in the international transport of goods.
Advertising strategy A well-structured advertising strategy can distinguish the difference between a prosperous and
successful company and its competitors. It is vital that we target the right customers through the
correct forms of advertising media best equipped for our company.
We have agreed on releasing a 15-20% sale on our products for the first six weeks of opening and
also including deals such as “buy one get one free” whereby the customer can choose a certain
product for free to go with their purchase. KIKO in Italy will send us a large quantity of products
which will be on sale in order to attract new customers to the brand. In order to promote these
sales we will be using our Facebook, Instagram and Twitter page to raise awareness to any
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potential clients. It is vital when promoting on social media that when creating a makeup
advertisement, use words or phrases that will attract the consumer to the product and choose
the KIKO brand over our competitors. Such words can include long lasting, new, hot etc. These
eye catching words can play a more crucial role than just selecting a symbol or picture of a model
on the advertisement. For our first month we will organize a special guest or makeup artist to
come in once a week and give tutorials on how to use the KIKO makeup, this is a strategy we
could continue to adopt in the future whereby we will organize special events for the customers
to walk into our store and follow any advice given by the guests.
Our plan is to contact TV shows such as Expose’ and editors like beaut.ie to help us promote our
store and the KIKO brand by introducing our new facility in Dundrum Town Centre and writing
articles to show the high quality and value of the KIKO brand compared to our competitors.
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VIII. Projected profit and loss statement & Balance Sheet Profit and loss statement
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Balance Sheet
IX. Controls
KIKO expects each of its branches to operate in a manner whereby all of our customers will
receive the best possible quality of service which will in turn increase our sales conversions and
drive profits, allowing us to expand the brand globally. Throughout all KIKO branches worldwide
our level of standards is expected to be equally superior, and these standards are reinforced in
various methods.
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Monitoring Performance 1. Selecting and training of new employees will initially be managed and supervised by the
nearest responsible KIKO Human Resources department (KIKO UK Head Offices, London).
In the beginning period whereby there will be no Area Manager needed to supervise the
single Irish store, KIKO Dundrum’s management will report to the Area Manager
responsible for Central England.
2. KIKO Dundrum will be subject to several scheduled and impromptu inspection visits from
KIKO HQ managers in order to ensure that the overall company guidelines are being
continually met. We will also send our head of Profit Protection for two visits per year.
3. KIKO employees will be required to work within the expected employee guidelines which
are set out in our Employee Handbook, which is given to each employee on signature of
their contract. These guidelines include notes on service standards, product knowledge
requirements, and employee appearance expectations. The guide also includes essential
information for employees which can be used individually to refresh their training on
health and safety aspects, customer service techniques, etc.
4. KIKO receipts are issued with unique codes allowing customers to rate their in-store
shopping experience online. These reviews will be monitored by KIKO Head Office staff in
order to exemplify exceptional employee service and identify negative issues occurring in
stores.
5. Biennially, all employees will be invited to take part in our Employee Experience online
survey, in order to ensure that our stores are being run in accordance with the highest
possible standards.
RATIO ANALYSIS 2016
PROFITABILITY
Gross profit margin available in Trading, Profit and Loss Account for 2016
Return on Capital Employed
147,707 X 100 = 34.41%
429,244 1
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Percentage Mark-Up on Cost
750,000 X 100 = 3750%
20,000 1
Net Profit Margin
147,707 X 100 = 18.46%
800,000 1
LIQUIDITY
Current Ratio
424,044 :0 = 424,044:0
Acid Test Ratio
424,044 - 20,000 :0 = 404,044:0
ACTIVITY
As our store is stocked and funded by the existing KIKO company, there are no debtors and
creditors figures available for the activity ratios.
Across all areas of financial performance our store is expected to perform well. Due to the funding
of the store from existing KIKO profits and Percassi Group capital, possible debt repayments are
not viewed at this time to be threatening. We note a significantly high return on the capital which
we are to receive from the group, supported by our noted mark-up percentage and net profit
margins. As previously mentioned, the in-company funding leaves us with no creditors, and as
such the liquidity of this store will be in prime position. It is our intention to use our continuing
profits to keep our store operating without needing intervention, loans or having to owe money
to creditors.
X. Conclusion We believe that if implemented that the marketing plan we have detailed above would ensure
the successful introduction of the KIKO brand into the Irish market. Further than this Dundrum
store, KIKO could use this plan to effectively spread the brand to all four corners of Ireland.
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We have learned about the importance of taking into consideration every minor detail while
considering the formation of a comprehensive B2B marketing plan. As such we have enhanced
our knowledge of EU requirements surrounding trade and the cultural nuances which affect
international marketing strategies.
For each of us this has been our most rewarding experience of working in a group. We feel that
we have maximised our time keeping skills, communication skills and exploited each member’s
full working potential in order to present you with a project of which we are extremely proud.
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XI. Appendix Appendix 1: KIKO MILANO logo
Appendix 2: Current KIKO stores in the UK & Ireland
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Appendix 3: Survey conducted among 100 participants
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Appendix 4: Projected Profit and Loss Account & Balance Sheet for 2018
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REFERENCES
Arthur Beesley. (2015). Irish economic growth hits 7% as recovery outstrips targets.
Available: http://www.irishtimes.com/business/economy/irish-economic-growth-hits-7-
as-recovery-outstrips-targets-1.2461403. Last accessed 16th February 2016.
Carlo Consonni. (2014). Consolidated Financial Statements as at 31 December 2013.
Available:
http://www.ise.ie/debt_documents/Kiko%20Group%20Consolidated%20Financial%20St
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